Dr Frikkie Maré, academic head of the Department of Agricultural Economics at the University of the Free State (UFS), provides a monthly agri market overview of the previous month’s agricultural markets. This is the overview for January 2020.
The price of yellow maize was quite volatile during January. The uncertainty regarding the size of the new harvest also affected the market, which closed at R2 825/ton.
The rand weakened against major currencies in January and traded at R14,98 and R16,62, respectively, against the dollar and the euro at the end of the month. Both consumer price inflation (CPI) and producer price inflation (PPI) increased to 4% and 3,4%, respectively, on a year-on-year basis in December.
The prime lending rate decreased to 9,75% in January. The economic growth for the third quarter of 2019, as prescribed by the GDP, decreased to 0,1% on a year-on-year basis. The economy also declined by 0,6% quarter-on-quarter.
Red meat market
During January, the market for all three grades of mutton carcasses showed a rather rapid decline, compared to December’s high prices. However, the price of beef improved. The latest available prices for beef in January were R45,40/kg for A2, R41,32/kg for B2 and R39,95/kg for C2. The last available prices for A2, B2 and C2 lamb and sheep carcasses were R71,80/kg, R55,96/kg and R53,63/kg, respectively.
In the case of weaner animals, the price of both lamb and beef increased. The last available prices were R32,56/kg for calves and R32,75/kg for lambs. The prices of hides and skins also showed further sideways movement.
Wool and mohair market
The wool market showed a modest decline during January with no auctions for mohair during the month. The clean wool indicator decreased by 0,5% at the last auction of January, and is still trading 24% lower than last year. The mohair indicator weakened by 2,3% compared to the previous auction. It also traded 27,4% lower than last year.
The PPI of milk and eggs increased in December, while the index of dairy products decreased. The CPI of milk, eggs and cheese decreased during the same period.
Click here to read the October 2019 market overview. – Dr Frikkie Maré, University of the Free State